More Than Just an End User Statement: Best Practices for Evaluating End Users

This past summer the Bureau of Industry and Security (BIS) released a new presentation: “End-Use Monitoring and Effective Export Compliance.”

Their plan is to use comprehensive End-Use checks (EUCs), also know as “end user statements,” to hinder the unauthorized export and re-export of items subject to export control. The Departments of Commerce, State and Defense are all involved in stringent end-use monitoring programs.

An EUC verifies that an export’s end user is a “reliable recipient” and will use the export item/s in accordance with Export Administration Regulations (EAR). Conducted by Export Control Officers, Export Enforcement personnel and U.S. embassy officials, the selective checks on dual-use and munitions exports focus on:

License condition compliance

Compliance of non-licensed transactions

End-use confirmation

Determining whether or not the company is a reliable end user

Discovering more information about the parties involved

While the government is doing its job to keep controlled goods out of the wrong hands, we must do our part to support their efforts and facilitate successful end-use checks. From the BIS, some best practices for evaluating the recipients of our goods:

Screen customers. This should go without saying. Ensure you have access to the most current government watch lists and that your screening process includes re-screening. The person you do business with today could appear on a restricted party list tomorrow.

Request an end-user statement or certificate. Discussed further in this article, the end-use statement certifies that a buyer is the final recipient of exported materials and has no intention of re-exporting said materials to anyone else. This document can play a vital role in preventing export violations and providing proof of your due diligence.

Provide license/regulatory conditions in writing and obtain written confirmation. This helps ensure conditions are clear for all parties involved, and provides protection for your organization in case authorities have questions.

Request business registration. Excitement about a potential new customer, or concerns about causing offense shouldn’t stop you from making this request. An organization with nothing to hide should have no qualms about sharing.

Review social media sources. It’s not slacking, it’s research. It’s amazing what you can learn about a company or individual from browsing Twitter, Facebook, LinkedIn and other sites. Empowering yourself with knowledge about who you’re doing business is always worth the time and effort.

The BIS presentation reminds that regardless of all that the government is doing to help, it’s important for organizations to be mindful and proactive about their own export compliance. End user awareness is just one way that companies can protect their reputation, avoid the financial consequences of export violations, and do their part to protect national security.